Saturday, 1 October 2011
HARD TO EARN
From the recession to the lockout.
BY TIM DAVID HARVEY
We are less than a month away from the start of the 2011/2012 NBA season, but is this the end? We are still very much in a lockout, because apparently the love for the game isn't enough. Money matters and you best believe-despite what they say-we are still in a recession people. In today’s economic climate we are all still feeling the sting, rich or poor it effects us all. Even platinum rapper Young Jeezy released an album called 'The Recession'. Let's take a look away from the lockout for a moment and look at other cash flow issues the NBA has. In one of the biggest money making sports leagues in the world which teams are fairing better and how long can this glitz and glamour NBA keep burning through cash in these hard times? We already know the buck is stopping with the season's scheduled games but how long can this association be overdrawn?
Let's take a look back at the source. Let's rewind to an important day in the Summer 0f '09 (not as glamorous as Bryan Adams '69 record mark my words). Here we are at the tail end of July and memories of the NBA Finals over a month removed were still fresh in our minds. The NBA draft was almost a month back and we were amidst an eventful summer of free agency. Even with all that however already the champion Lakers had bought in another All Star, the Celtics have bolstered their deep roster and Shaquille O'Neal has signed with his third different team in many a year. Just another week in the big business that is the National Basketball Association, who's teams seem to be saying ‘Recession, what recession?’ until…
…the reality check of July 7th came along. The NBA announced that the salary cap for the following season would be lowered by almost $1 million to $57.7 million and the luxury tax would be lowered from $71.15 to $69.92. This meant that teams with salaries that peaked above the mark of $69.92 million would have to pay a $1 tax for every dollar they exceed. This is something teams definitely wanted to avoid, especially in this league were money is king (Sorry Lebron) it was another cost to endure in an unpredictable league and an even more unpredictable financial market. A league and it's market today that still can't predict an end to this miserable lockout which is surely costing the players and the owners more money than is being negotiated.
Still, back then the NBA was said to have a ‘Soft cap’ and teams were and are allowed to exceed the cap in order to retain a free agent who was already on their team. This is known as ‘The Larry Bird Exception’ and teams like the 80’s Celtics with the luck of Larry will be able to stay competitive for many more years, unless these type of teams reside in Cleveland, I guess that exception was not a Cavalier decision with the biggest of players. The lowering of the Salary cap however, ensured it was the players and not the teams that were effected by this the most. The free agents who could demand a higher pay scale could flock to the top teams that can ante up in their favour, (see the previous sarcastic comment and 'talents taken to; South Beach').
Its not about the money, its not about business, right? Wrong! Remember last week when your mans word was stronger than oak, the same guy now realises that nine rooms might not be enough, as they look to set sail on a Sprewell yacth complete with his rims. Of course this isn’t the case of every NBA player and losing a couple of million when you’re a multi-millionaire is simply pocket change. Still, however a player has to ask himself which form of ‘ballin’ do they subscribe to and which ‘rock’ would they rather have in their hand. For a basketball purist its hard to swallow but money at least makes this world go round. Who's really being greedy in this lockout however? The owners or the players? Who's looking after their future and who's holding out an Oliver Twist bowl? MORE? What's going to keep the beat of next season going? The players hearts or their cheque-books? Who really loves this game?
When lesser teams have a strict budget-especially with what's happening today and this stale Summer signing period-some of the most sought after free agents and trades may be passed up, especially with the majority of franchises pinning their futures on free agent classes like they were draft days. Still however back in 2009 the billion dollar industry and it's teams were still splurging and spending, wheeling and dealing to make it to the top. Frequent trade-bait Shawn Marion and sought after free agent Hedo Turkoglu were involved in a four team deal and Ron Artest and Trevor Ariza were snapped up by the star laden Lakers and Rockets respectively, almost like a backwards trade, leaving their respective teams for the other, swapping residences and lockers.
Youtube Ron Artest’s signing with the Lakers and you’ll see him toasting his dream move with Mitch Kupchak in a swanky LA spot. As they charge their glasses, Mitch toasts to the next time they taste champagne being in the NBA Finals in June, a great statement for a Lakers repeat and in these times maybe the next time they can afford a decent bottle of champagne. This was all before the big-three free-agent circus that was last year, which probably saw more cigar and champagne bills than an average night in with Hugh Hefner. No wonder some of Miami's promotional staff got laid off, what else is there to flaunt?
OK so maybe a successful, championship team like the Lakers with their Hollywood fan base filling the Staples Centre on a nightly basis have little to worry about. Then again playing in a big market doesn’t always guarantee financial success. Take the Knicks who along with the Mavericks needed to pay luxury tax to the tune of in excess of $23 million in 2009, thank God for a Carmelo trade and a Texan championship, as now these franchises are out of the firing line and back in top Trump style business, time to light up the Cuban's hey Mark? Still sometimes instead of trading cash considerations owners might want to consider his cash. Every little help rights? Every penny counts? Even in the big leagues and big business markets it's always good to save and put something away for a rainy day, or a rained out, locked out NBA season. This isn't baseball, but it sure is moneyball and the only one who's going to win next (Oscar) season is Brad Pitt and the MLB.
One way for teams to consider the amount of money their spending is for them to look at how much there bringing in. Whether you’re the Los Angeles Lakers or the Los Angeles Clippers, you must balance your books. We all know there’s a lot of money that even goes into just one NBA game, let alone a season and the preparation for it, hey that chalk that Lebron James tosses into the air isn’t cheap you know. One of he best ways for a team to bring in money right away is obviously through the fans. That’s right take delight in knowing your helping pay all those millions for some ex-All-Star-who's either injured or just there for show-to sit courtside in a suit all season and just be thankful that you don’t have to pay for Latrell Sprewell’s family to eat anymore (sorry again Spree, this aint personal, we're just staying).
Getting fans to the games and the merchandise and concession stands is important for teams to turn a profit. Still however regular season gate receipts show a $2.66 million deficit in 2009 throughout the league from 2008/2009's $1.1 billion and it hasn't got much better since. OK so speaking in NBA financial terms that 7.4% skid was spilt milk, but it still showed that ticket sales were souring. What will happen next season with these disheartened and disgruntled fans? Right now would many fans even be willing to buy a ticket or subscribe to a minute of league pass with this state of uncertainty for the future of next season?
Exciting young players with stacks of potential seem to be making stacks for the NBA right now...and these are the guys who's immediate future is in jeopardy. The Chicago Bulls came first in total attendance this year to the tune of 893,462 fans. To put this in perspective, back in our benchmark year of change in 2009 this figure was 847,903. Chicago's a big market but it's MVP Derrick Rose who is creating the biggest buzz in the United Centre since the other famous M.J. of the 90's took to the floor with his off the wall play. Even during a green-eyed visit to the United Centre this year, Jordan-whilst in attendance-saw first-hand how much the fans in Chi-town bloom at the same rate of the growth of Rose's career. These are the kind of markets and players which will help the league stack money and success. Maybe then nobody will be reaching into their pockets...except the fans and back to this point isn't it these paying customers that really are the ones that need to be considered.
With no real forecast available of how the economy will go-or when this lockout will end-its hard to tell which teams will prevail and which teams will fail. This is especially true when teams can do so well in attendance but also suffer big losses in attendance gate receipts. This is also evident when top teams and franchises playing in big markets will have more luxury tax problems that will only leave the fat cats of the NBA comfortable. This is your evidence of your lockout. This is my everyone is so evidently unhappy right now. One things for certain-in a league that these days is more business-is that money talks like Chris Tucker...and it's beginning to get annoying too (not you Chris, much love, it's the NBA that's leaving us 'P#£$*! off man').
Therefore even when everyone is digging deep in their pockets the richer teams will get richer and the poorer teams will get poorer one way or another. I guess those role players will have to play their role of sacrificing even more, while the big dogs keep barking. Thank God for the doberman Kobe and his pledge to lend money to his fellow NBA (not just Laker) teammates during the lockout. There’s only room at the top for a select few and when money isn't readily available its survival of the fittest in this league. Top tier teams and big markets will obviously be at an advantage but in a time where we all have to tighten our belts teams better have smarts too. Still, championship contenders will be more willing to pay greater salaries to those greater players and big name free agents won't always take diminishing salaries to sign with lottery bound teams. It looks like the Miami's and the Cleveland's are getting even more further apart. The giant teams are getting even bigger and the smaller franchises are being trampled on. Still, however the whole NBA is suffering. The players aren't getting to play and the owners aren't taking ownership. The competition should be on the hardwood courts, not the legal ones. This is a game, right? Who's playing who?